Ark Restaurants Corp. (NASDAQ:ARKR) today reported financial
results for the first quarter ended January 2, 2016.
Total revenues for the three-month period ended January 2, 2016
were $36,109,000 versus $33,359,000 for the three months ended
December 27, 2014. The three-month period ended January 2, 2016
includes revenues of: (i) $760,000 related to our Rustic Inn
property in Jupiter, FL which was opened on January 26, 2015, (ii)
$876,000 related to Shuckers in Jensen Beach, FL which was acquired
on October 22, 2015, and (iii) $901,000 related to the Southwest
Porch in Bryant Park, NY which was opened on July 1, 2015. The
three-month period ended December 27, 2014 includes revenues of
$642,000 related to three properties closed during or subsequent to
the quarter due to lease expirations.
Company-wide same store sales increased 1.9% for the three-month
period ended January 2, 2016 compared to the same three month
period last year.
The Company’s EBITDA, adjusted for non-cash stock option expense
and non-controlling interests, for the three-month period January
2, 2016 was $1,781,000 versus $2,331,000 during the same
three-month period last year. Net income for the three-month period
ended January 2, 2016 was $321,000, or $0.09 per basic and diluted
share, compared to $722,000, or $0.21 per basic and diluted share,
for the same three-month period last year.
The decrease of $550,000 in EBITDA, as adjusted for non-cash
stock option expense and non-controlling interests, resulted
primarily from higher than expected operating payrolls due to
inefficiencies and labor law changes, transaction costs of
approximately $120,000 incurred in connection with the purchase of
Shuckers and the closure, due to lease expirations, of three
properties in Las Vegas, one in November 2015 and two during our
prior fiscal year 2015.
Michael Weinstein, Chief Executive Officer, commented “We are
disappointed in the efficiency level of our payrolls and are
working with our mangers to address this.”
On October 22, 2015, the Company acquired the assets of Shuckers
Inc. (“Shuckers”), a restaurant and bar located at the Island Beach
Resort in Jensen Beach, FL, and six condominium units (four of
which house the restaurant and bar operations) for a total purchase
price of $5,650,000. The acquisition was financed with a bank loan
in the amount of $5,000,000 and cash from operations. The
Consolidated Condensed Statement of Income for the 13-week ended
January 2, 2016 includes revenues and earnings of approximately
$876,000 and $110,000, respectively, related to Shuckers.
As of January 2, 2016 the Company had cash and cash equivalents
totaling $5,880,000. The Company has notes payable outstanding, the
proceeds of which were used to finance the purchases of membership
interests in Ark Hollywood/Tampa Investment, LLC, the purchase of
The Rustic Inn in Dania Beach, Florida and the purchase of
Shuckers, with an outstanding balance of $9,831,000, net of the
unamortized balance of deferred financing costs in the amount of
$122,000 at January 2, 2016.
On October 22, 2015, in connection with the Shuckers
transaction, the Company also entered into a Credit Agreement (the
“Revolving Facility”) with its lender which expires on October 21,
2017 and provides for total availability of the lesser of (i)
$10,000,000 and (ii) $20,000,000 less the then aggregate amount of
all indebtedness and obligations to the lender. Borrowings under
the Revolving Facility will be evidenced by a promissory note (the
“Revolving Note”) and will be payable over five years with interest
at an annual rate equal to LIBOR plus 3.5% per year. As of January
2, 2016, no additional amounts were outstanding under the Revolving
Facility.
Ark Restaurants owns and operates 22 restaurants and bars, 19
fast food concepts and catering operations primarily in New York
City, Florida, Washington, D.C. and Las Vegas, NV. Six restaurants
are located in New York City, three are located in Washington,
D.C., five are located in Las Vegas, Nevada, three are located in
Atlantic City, New Jersey, one is located at the Foxwoods Resort
Casino in Ledyard, Connecticut, one is located in Boston,
Massachusetts and three are located in Florida. The Las Vegas
operations include four restaurants within the New York-New York
Hotel & Casino Resort and operation of the hotel's room
service, banquet facilities, employee dining room and six food
court concepts and one restaurant within the Planet Hollywood
Resort and Casino. In Atlantic City, New Jersey, the Company
operates a restaurant and a bar in the Resorts Atlantic City Hotel
and Casino and a restaurant in the Tropicana Hotel and Casino. The
operations at the Foxwoods Resort Casino include one fast food
concept and one restaurant. In Boston, Massachusetts, the Company
operates a restaurant in the Faneuil Hall Marketplace. The Florida
operations include two Rustic Inn’s, one in Dania Beach, Florida
and one in Jupiter, Florida, Shuckers in Jensen Beach, Florida and
the operation of five fast food facilities in Tampa, Florida and
seven fast food facilities in Hollywood, Florida, each at a Hard
Rock Hotel and Casino operated by the Seminole Indian Tribe at
these locations.
Except for historical information, this news release contains
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements involve unknown risks, and
uncertainties that may cause the Company's actual results or
outcomes to be materially different from those anticipated and
discussed herein. Important factors that might cause such
differences are discussed in the Company's filings with the
Securities and Exchange Commission. The Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Actual results could differ materially from those
anticipated in these forward-looking statements, if new information
becomes available in the future.
ARK RESTAURANTS CORP.
Consolidated Statements of Income
For the 13 week periods ended January 2, 2016 and December 27,
2014 (In Thousands, Except per share
amounts) 13 weeks ended 13 weeks ended January
2, December 27,
2016 2014 TOTAL
REVENUES
$ 36,109 $
33,359 COST AND EXPENSES: Food
and beverage cost of sales 9,592 8,747 Payroll expenses 12,310
10,855 Occupancy expenses 4,545 4,193 Other operating costs and
expenses 4,563 4,240 General and administrative expenses 3,328
3,000 Depreciation and amortization
1,138
1,105 Total costs and
expenses
35,476
32,140 OPERATING INCOME
633 1,219
OTHER (INCOME) EXPENSE: Interest (income) expense, net 79 57
Other (income) expense, net
(61 )
(57 ) Total other income, net
18 -
INCOME BEFORE PROVISION FOR INCOME TAXES 615 1,219 Provision
for income taxes
139
342 CONSOLIDATED NET INCOME 476 877
Net income attributable to non-controlling interests
(155 ) (155
) NET INCOME ATTRIBUTABLE TO ARK RESTAURANTS
CORP.
$ 321 $
722 NET INCOME PER ARK RESTAURANTS CORP.
COMMON SHARE: Basic
$ 0.09
$ 0.21 Diluted
$
0.09 $ 0.21
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic
3,418 3,378
Diluted
3,517 3,481
EBITDA Reconciliation: Pre tax income $ 615 $
1,219 Depreciation and amortization 1,138 1,105 Interest expense,
net
79 57
EBITDA (a)
$ 1,832 $
2,381 EBITDA adjusted for non-cash stock
option expense, and non-controlling interests: EBITDA (as defined)
(a) $ 1,832 $ 2,381 Net (income) loss attributable to
non-controlling interests (155 ) (155 ) Non-cash stock option
expense
104 105
EBITDA, as adjusted
$ 1,781
$ 2,331
(a)
EBITDA is defined as earnings before
interest, taxes, depreciation and amortization and cumulative
effect of changes in accounting principle. Although EBITDA is not a
measure of performance or liquidity calculated in accordance with
generally accepted accounting principles (GAAP), the Company
believes the use of this non-GAAP financial measure enhances an
overall understanding of the Company's past financial performance
as well as providing useful information to the investor because of
its historical use by the Company as both a performance measure and
measure of liquidity, and the use of EBITDA by virtually all
companies in the restaurant sector as a measure of both performance
and liquidity. However, investors should not consider this measure
in isolation or as a substitute for net income (loss), operating
income (loss), cash flows from operating activities or any other
measure for determining the Company's operating performance or
liquidity that is calculated in accordance with GAAP, it may not
necessarily be comparable to similarly titled measures employed by
other companies. A reconciliation of EBITDA to the most comparable
GAAP financial measure, pre-tax income, is included above.
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version on businesswire.com: http://www.businesswire.com/news/home/20160212005613/en/
Ark Restaurants Corp.Robert Stewart,
212-206-8800bstewart@arkrestaurants.com
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